Won Leads Gain in Asian Currencies on Spain Bailout, China Data

By David Yong -
Jun 11, 2012

Asian currencies rose, led by the
biggest rally in South Korea’s won in two weeks, as Spain’s
request for a banking bailout and data showing China’s exports
climbed twice as fast as economists estimated supported stocks.

The Bloomberg-JPMorgan Asia Dollar Index added to its first
weekly gain since April, while the MSCI Asia-Pacific Index of
shares rallied 1.9 percent. Spain asked euro-region governments
over the weekend for as much as 100 billion euros ($126 billion)
to shore up its lenders, according to Economy Minister Luis de
Guindos. Government reports today showed factory output in
Malaysia and exports from Singapore beat forecasts.

“The news of the bailout in Spain supports sentiment for
riskier assets,” said Disawat Tiaowvanich, a foreign-exchange
trader at Bangkok Bank Pcl. “China’s data over the weekend
should also be supportive.”

The won strengthened 0.8 percent to 1,165.85 per dollar at
the close in Seoul, according to data compiled by Bloomberg. The
Philippine peso rose 0.8 percent to 42.915, Malaysia’s ringgit
advanced 0.6 percent to 3.1673 and Thailand’s baht climbed 0.4
percent to 31.58.

The Asia Dollar Index, which tracks the region’s 10 most-
used currencies excluding the yen, has rebounded 0.7 percent
since touching 113.68 on June 1, the lowest level since
September 2010. Its 60-day historical volatility dropped to 2.82
percent from 2.84 percent on June 8.

Investment in Malaysia

Malaysian industrial production rose 3.2 percent in April
from a year earlier, compared with the median estimate of 2
percent in a Bloomberg survey. Non-oil domestic exports from
Singapore increased 3.2 percent in May from a year earlier,
compared with the 3 percent gain forecast in a Bloomberg survey.

“The domestic story in Malaysia is firmer than what it is
in other parts of Asia,” said Jonathan Cavenagh, a currency
strategist in Singapore at Westpac Banking Corp. “The market
has been looking for a circuit breaker to get it out of this
risk-averse mood, and the news on Spain is positive in the near
term.”

India’s industrial production probably rose 1.7 percent in
April from a year earlier, after contracting 3.5 percent in
March, according to analysts’ estimates in a Bloomberg survey.
The government will report the data tomorrow. The rupee
strengthened 0.3 percent to 55.3187 per dollar.

Chinese Loans Rise

Exports from Asia’s largest economy increased 15.3 percent
in May from a year earlier, versus the 7.1 percent median
estimate in a Bloomberg survey and the 4.9 percent gain in April,
the government said yesterday. China’s new lending in May beat
analysts’ estimates, data showed today. Local-currency loans
were 793 billion yuan ($125 billion), compared with 682 billion
yuan in April.

The yuan appreciated 0.02 percent to 6.3690 per dollar in
Shanghai, according to the China Foreign Exchange Trade System.
The central bank strengthened its reference rate by 0.03 percent
to 6.3169, the strongest level since May 22.

Elsewhere, Taiwan’s dollar advanced 0.2 percent to
NT$29.920 against the greenback, while Indonesia’s rupiah gained
0.3 percent to 9,446. The Vietnamese dong was steady at 20,990.